Rupee ends down on importer dollar demand in dull trade

Reuters: The rupee closed slightly weaker on Thursday as importer dollar demand surpassed mild greenback sales by exporters in dull trade, dealers said.

The spot rupee ended at 153.85/95, compared with Wednesday’s close of 153.75/95.

“It was a dull day. Remittances were quite dull and the imports were not that significant,” said a currency dealer.

The rupee might witness volatility with the government’s heavy debt repayment this year, said dealers.

Sri Lanka aims to raise $ 500 million this month via development bonds, the Central Bank said last week, as the government faces unprecedented debt repayment this year.

President Maithripala Sirisenea’s administration must repay an estimated Rs. 1.97 trillion ($ 12.85 billion) in 2018 - a record high - including $ 2.9 billion of foreign loans, and a total of $ 5.36 billion of interest.

The currency fell 2.5% last year and 3.9% in 2016.

The Central Bank, while announcing its key economic policies for the year on 3 January, said it has allowed more flexibility in determining the exchange rate based on the present market conditions.

It added intervention policies will be adopted consistent with a flexible exchange rate regime and supportive of improving foreign exchange market functionality, and maintaining a competitive exchange rate will be an important objective.

Bourse extends fall on foreign selling

Reuters: Shares fell for a seventh straight session on Thursday and closed at their lowest in nearly three weeks, as foreign investors turned net sellers for the first time in 14 sessions while local players stayed on the sidelines.

Foreign investors, who have been net buyers of Rs. 2.7 billion worth shares so far this year, sold equities worth net Rs. 279.5 million ($ 1.82 million) on Thursday, especially banks and blue chips.

They net bought Rs. 18.5 billion worth equities in 2017 and Rs. 633.5 million in 2016.

The Colombo Stock Index ended 0.45% weaker at 6,410.11, its lowest close since 29 December. It has shed 2% in the past seven sessions.

“Market came down on some foreign selling. But turnover was pushed up by foreign trade,” said Atchuthan Srirangan, a senior research analyst with First Capital Holdings Plc.

Turnover stood at Rs. 1.3 billion, higher than last year’s daily average of Rs. 915.3 million.

Shares in Commercial Bank of Ceylon Plc dropped 2.8%, Hemas Holdings Plc declined 4.1%, and Ceylon Cold Stores Plc fell 2.1%.